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September 4, 2020

Malaysia withdraws 1MDB charges against Goldman Sachs units

Malaysian authorities have withdrawn criminal charges against three subsidiaries of Goldman Sachs for their role in the 1MDB Malaysian state fund scandal.

The three subsidiaries are Goldman Sachs International, Goldman Sachs (Asia) and Goldman Sachs (Singapore). They are headquartered in London, Hong Kong, and Singapore.

Together, the three companies faced four charges each and had pleaded not guilty to the charges.

All these charges have now been dropped.

Malay Mail quoted deputy public prosecutor Masri Mohd Daud as telling the High Court: “Yang Arif, there are new developments in this case, where the prosecution does not plan to continue prosecution on all charges on all Goldman Sachs entities.

“With that we withdraw the charges.”

Settlement agreement details

Goldman Sachs finalised a $3.9bn agreement with the Malaysian government last month to resolve 1MBB-linked allegations.

In addition to a cash payment of $2.5bn to Malaysia, the agreement also includes a guarantee to return at least $1.4bn in proceeds from 1MDB-related assets.

Goldman Sachs reportedly has to pay the cash in 10 days.

Under the agreement, the government also agreed to drop criminal charges against some of the bank’s employees, excluding Tim Leissner and Roger Ng.

Malaysian authorities filed criminal charges against Leissner and Ng in 2018.

The pair allegedly conspired with the scandal’s mastermind Jho Low.

1MDB background

Around $4.5bn is said to have been diverted from 1MDB.

Some of these misappropriated funds were used to buy art, property, private jet, superyacht, among others.

Goldman Sachs allegedly helped 1MDB raise $6.5bn through bond sales.

The bank is said to have earned $600m from the bond deals.

Last month, Malaysia’s former prime ministerNajib Razak was sentenced to 12 years in prison for his involvement in the corruption.

The scandal led to the topping of Razak’s party after being in power for 61 years.

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